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Blue Shield Insurance defers payments to creditors, policy holders

NEWS
By Nicholas Waitathu | May 27th 2014

By Nicholas Waitathu

Kenya: Blue Shield Insurance creditors and policyholders will have to wait longer for payments following another extension of the moratorium from May to July this year.

 The Statutory Manager Eliud Muriithi extended the payment freeze to July 4.

This the fifth time for the moratorium to be extended since the company was placed under statutory management on September 2011 due to its inability to honour claims.

In a Kenya Gazette notice published last week, Muriithi said the moratorium on payments to policyholders and creditors has been extended following a court order obtained by the Commissioner of Insurance on May 9, 2014.

The first order of extension was issued in September 2012, giving the manager 12 months to make payments. It was then extended to November 20, 2013 before this date was revised to January 31 and later to March 28 and now to July 4 this year. Before being placed under statutory management, Blue Shield was among major provider of insurance cover to public service vehicles.

The public transport is one of the high risk sectors that has contributed to collapse of a number of insurance firms.

 Since 2005, four insurers have collapsed.  Some of the collapsed insurers include United Insurance Limited, Standard Assurance, Concord Insurance and Invesco Assurance which has since been revived.

Concord Insurance Company was placed under statutory management in February 2013 after it failed to meet its financial obligations as an insurer.

The firm was unable to pay claims to claimants and other creditors and also failed to meet its statutory obligations, including the payment of levies, as prescribed in the Insurance Act.

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